Renaissance Re reports $207 million operating loss

RenaissanceRe Holdings Ltd. (NYSE: RNR) has incurred a net operating loss attributable to common shareholders of $206.9 million in the Q4 of 2005, which the Company says mainly reflects a $313.9 million net negative impact from hurricane Wilma.
These results compared to net operating income available to common shareholders of $188.6 million reported for the fourth quarter of 2004. Net operating (loss) income excludes net realized investment losses of $3.5 million in the Q4 of 2005 and net realized investment gains of $2.8 million in the Q4 of 2004.
Net operating loss per common share was $2.92 in the Q4 of 2005, compared to net operating income per common share of $2.62 in the Q4 of 2004.
Net loss attributable to common shareholders was $210.4 million or $2.97 per common share in the quarter, compared to net income available to common shareholders of $191.5 million or $2.66 per common share for the same quarter of 2004.
Neill A. Currie, CEO of RenaissanceRe, reports that it is the first time in the Copmany’s corporate history that there has been an operating loss for the year. She reiterates that this years loss was primarily the result of the very active hurricane season. Curie reiterates that although this loss proves disappointing financially, it did allow the Company to demonstrate the value it offers its customers by way of its: rapid and reliable claims payment; capacity to price and bind contracts in all market conditions; and, through the strength of its balance sheet.
“For 2006, we are projecting operating EPS of $6.50 to $7.00, reflecting an operating return on equity of approximately 25%, assuming normal loss activity,” Currie adds. “This projection assumes over 15% growth in managed catastrophe premiums, 15% growth in individual risk premiums, and a 35% decline in specialty reinsurance premiums compared to normalized levels of premiums for 2005.”
Currie indicates that specialty reinsurance market conditions are not as attractive as hoped but she adds that this renewal season, RenaissanceRe realized a number of opportunities in its catastrophe reinsurance business. Currie says the Company expects to see more opportunities in both catastrophe reinsurance and in individual risk over the course of 2006.
Hurricane Wilma resulted in a $313.9 million net negative impact to the Company and reflects an increase from the Company’s prior initial estimate of $250 to $300 million. The Company’s Reinsurance segment was negatively impacted by $258.6 million and its individual risk segment was negatively impacted by $55.3 million.